Corporate Vs Individual Restraining Order Dismissal by sgw19866

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									                CREDITORS’ RIGHTS AND REMEDIES
                         CONTENTS


 1   Provisional Process
         (2002 ed) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thomas W. Stilley
         (2006 supp) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . William G. Fig

 2   Alternatives to Bankruptcy: Assignment
     for Benefit of Creditors and Receivers
         (2002 ed & 2006 supp) . . . . . . . . . . . . . . . . . . . . . James Ray Streinz

 3   Statutory and Possessory Liens
         (2002 ed & 2006 supp) . . . . . . . . . . . . . . . . . . . . . . J. Stephen Werts

 4   Enforcement of Foreign Judgments
         (2002 ed) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jonathan E. Cohen
                                                                             Paul Migchelbrink
         (2006 supp) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . John Davenport

 5   Practical Discovery
         (2002 ed) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . William N. Stiles
         (2006 supp) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Keith J. Nichols

 6   Execution
         (2006 rev) . . . . . . . . . . . . . . . . . . . . . . . . . . . Gary L. Blacklidge

 7   Garnishment
         (2002 ed & 2006 supp) . . . . . . . . . . . . . . . . . . . . Mark B. Comstock

 8   Decedents’ Estates
         (2002 ed) . . . . . . . . . . . . . . . . . . . . . . . . . . . Donald W. Green III
         (2006 supp) . . . . . . . . . . . . . . . . . . . . . . . . . . . David C. Streicher

 9   Exemptions
         (2002 ed) . . . . . . . . . . . . . . . . . . . . . . . . Hon. Elizabeth L. Perris
         (2002 ed & 2006 supp) . . . . . . . . . . . . . . . . . . . . . . Linda Johannsen
         (2006 supp) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thomas M. Renn

10   Supplementary Proceedings
         (2002 ed) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . William N. Stiles
         (2006 supp) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Barry P. Caplan




                                                                                      2006 Rev
Contents (continued)


 11        Fraudulent Conveyances and
           Creditors’ Bills
              (2002 ed & 2006 supp) . . . . . . . . . . . . . . . . . . . . . Brent G. Summers



           Table of Forms and Appendixes
           Table of Statutes and Rules
           Table of Cases
           Subject Index




2006 Rev
  1                                                     THOMAS W. STILLEY*




                     PROVISIONAL PROCESS



 I.    INTRODUCTION
       A. (§1.1)  Scope
       B. (§1.2)  Brief History of Provisional
                  Process Law in Oregon
II.    EXPLANATIONS, DEFINITIONS, AND DISTINCTIONS
       A. Provisional Remedies Covered in This Chapter
          1. (§1.3)       Attachment
          2. (§1.4)       Garnishment
          3. (§1.5)       Claim and Delivery
       B. Provisional Remedies Not Covered in This Chapter
          1. (§1.6)       Receivership
          2. (§1.7)       Temporary Restraining Order
       C. (§1.8)     Execution
       D. (§1.9)     Definitions Under ORCP 81




THOMAS W. STILLEY, B.B.A., University of Texas (1977); J.D., University of
Houston (1988); member of the Oregon State Bar since 1988 and the Washington
State Bar Association since 1992; partner, Sussman Shank LLP, Portland.
*The author acknowledges Barry P. Caplan, John P. Davenport, and Nancy E.
Hochman for their work on prior editions of this chapter.

The case citations in this chapter were checked for overrulings and reversals through October
2002. The ORS citations were checked through 2001.


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III.   (§1.10) ISSUANCE OF PROVISIONAL PROCESS
       A. (§1.11)    Facts Justifying Provisional Process
            1. (§1.12)     General Showing
            2. (§1.13)     Additional Facts Supporting Entitlement
                           to Specific Relief
            3. (§1.14)     Immediate Provisional Process vs.
                           Allowance of Remedy After
                           Show Cause Hearing
       B. (§1.15)    Motion and Affidavit: General Facts Alleged
       C. Obtaining the Order
            1. (§1.16)     Immediate Process Requested
            2. (§1.17)     The Show Cause Order
            3. (§1.18)     Serving the Order
            4. (§1.19)     Extension of Hearing Date
            5. (§1.20)     Waiver of Right to Hearing
       D. The Hearing
            1. (§1.21)     Burden of Proof
            2. (§1.22)     Evidence Admissible at the Hearing
            3. (§1.23)     Required Findings
       E. Form of Order After Hearing
            1. (§1.24)     Writ of Attachment
            2. (§1.25)     Writ of Garnishment
            3. (§1.26)     Claim of Lien
            4. (§1.27)     Claim and Delivery
            5. (§1.28)     Restraining Order
       F. (§1.29)    Clarity of Order
IV.    UNDERTAKING ON PROVISIONAL PROCESS
       A. (§1.30) When Required
       B. (§1.31) Form of Security or Bond
          1. Corporate Sureties
               a. (§1.32)    Qualifications and Affidavits
               b. (§1.33)    Procedure for Obtaining
                             Corporate Surety Bond
          2. (§1.34)   Individual Sureties
       C. (§1.35) Service
       D. (§1.36) Objections to Sureties


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  V.    ATTACHMENT
        A. When Available
           1. (§1.37)      Actions at Law
           2. (§1.38)      ORCP 84 A
           3. (§1.39)      Not Available in Certain
                           Consumer Transactions
           4. (§1.40)      Valid Underlying Claim
           5. (§1.41)      Counterclaims
           6. (§1.42)      Actions Against Financial Institutions
        B. Property Subject to Attachment
           1. (§1.43)      Property Not Exempt from Execution
           2. (§1.44)      Real Property
           3. (§1.45)      Personal Property
           4. (§1.46)      Partial Interest in Property
           5. (§1.47)      Property in Custody of the Law
           6. (§1.48)      Interest of an Heir in an Estate
 VI.    PREJUDGMENT GARNISHMENT
        A. (§1.49) In General
        B. (§1.50) When Available
        C. (§1.51) Contents of Writ
        D. (§1.52) Issuance
        E. (§1.53) Service
        F. (§1.54) Notice to Defendant
        G. (§1.55) Procedure After Service
VII.    CLAIM AND DELIVERY
        A. (§1.56) When to Use
        B. (§1.57) Prerequisites
        C. (§1.58) Early Dismissal of Case Prohibited
        D. (§1.59) Required Elements in Application for
                   Claim and Delivery
        E. (§1.60) Form of Order
VIII.   RESTRAINING ORDERS
        A. (§1.61) Defined
        B. (§1.62) When Available
        C. (§1.63) Injunctions and Receiverships Not Covered


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IX.    SPECIAL PROVISIONAL PROCESS PROBLEMS
       A. (§1.64)  Service of Provisional Process
           1. (§1.65)   Writ of Attachment
           2. (§1.66)   Writ of Garnishment
           3. (§1.67)   Claim of Attachment Lien
           4. (§1.68)   Claim and Delivery
       B. (§1.69)  Redelivery of Attached Property
       C. (§1.70)  Third-Party Claims
FORMS
1-1  Motion for Issuance of Provisional Process
1-2  Affidavit in Support of Motion for Provisional Process
1-3  Order to Show Cause
1-4  Temporary Restraining Order Pending Hearing
1-5  Order for Issuance of Writ of Attachment
1-6  Undertaking for Attachment
1-7  Writ of Attachment
1-8  Claim of Attachment Lien
1-9  Motion for Order to Show Cause
1-10 Affidavit in Support of Motion for Order to Show Cause
1-11 Instructions to Sheriff
1-12 Order Granting Provisional Process
1-13 Order of Claim and Delivery




                         I. INTRODUCTION
A.    (§1.1)      Scope
      This chapter is intentionally broad. It will assist a lawyer in using
all provisional (prejudgment) remedies except temporary restraining
orders under ORCP 79 and receiverships under ORCP 80. See chapter 2,
infra; 2 OREGON CIVIL PLEADING AND PRACTICE chs 30–31 (Oregon
CLE 1994 & Supp 2001). The Council on Court Procedures and the
legislature decided in 1981 to establish separate rules for those two very
important provisional remedies. All other provisional remedies are
subject to ORCP 81–85:

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                                               Provisional Process / §1.2

•    ORCP 81 is a general rule containing definitions, the method of
     serving notice or orders, and methods of challenge by adverse
     claimants to property for which provisional process is sought.
•    ORCP 82 pertains to bonds and undertakings in all provisional
     process, including temporary restraining orders, preliminary
     injunctions, and receiverships. See ORCP 82 A(1)–(2). This
     chapter is limited to applying that rule to attachment, prejudgment
     garnishment, and claim and delivery.
•    ORCP 83 outlines the procedure for obtaining any form of
     provisional process, other than temporary restraining orders under
     ORCP 79 and receiverships under ORCP 80.
•    ORCP 84, by its language, contains rules limited to an application
     for a writ of attachment. ORCP 84 A(1). However, an application
     for a prejudgment writ of garnishment is subject to ORCP 83 and
     84. ORS 18.605(1)(b), (2)(c). Accordingly, the law is the same for
     applying for and obtaining a prejudgment writ of garnishment as
     it is for attachment. Although a prejudgment writ of garnishment
     may be issued by a lawyer or the clerk of the court, ORCP
     84 D(2)(b), only the clerk of the court may issue a prejudgment
     writ, ORS 18.635. ORCP 84 D provides that when the writ of
     attachment is issued, the sheriff must attach and safely keep all of
     the defendant’s nonexempt property except for property in the
     possession of and debts owed by third parties, which is attached
     by applying for and obtaining a prejudgment writ of garnishment
     as provided in ORS 18.600–18.850.
           CAVEAT: An open question exists regarding procedural steps
     for third-party claims in a prejudgment garnishment situation.
     ORS 18.725 does not refer to ORCP 81 C (rights of an adverse
     third-party claimant). Thus, whether an adverse claimant to
     property that has been seized under a prejudgment writ of
     garnishment should assert his or her claim under ORS 18.725 or
     ORCP 81 C is unclear. It appears that the courts will accept the
     challenge of an adverse party claimant under either authority.

B.   (§1.2)       Brief History of Provisional
                  Process Law in Oregon
      Before 1973, Oregon’s statutory scheme of provisional process was
set forth in former ORS chapter 29. Those statutes regulated attachment
and prejudgment claim and delivery (replevin). In the 1973, the Oregon
Legislature established a procedure for obtaining provisional remedies

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§1.2 / Provisional Process

that complied with the requirements of Fuentes v. Shevin, 407 US 67,
92 S Ct 1983, 32 L Ed2d 556 (1972), in which the Court struck down
prejudgment replevin statutes that allowed seizure of property without
notice to the debtor or an opportunity for a prior hearing. The Court
held those statutes invalid as a deprivation of property without due
process by denying the right to an opportunity to be heard before
seizure. Postseizure hearings were found to be insufficient to protect the
debtor’s rights. The case was commonly thought to apply to all
prejudgment provisional remedies, and subsequent cases confirmed this.
(The Oregon courts do not always agree. See Rocky B. Fisheries v. No.
Bend Fab., 66 Or App 625, 630–633, 676 P2d 319 (1984).)
     In 1981, the legislature adopted ORCP 81–85, which substantially
followed former ORS 29.025–29.075. The writ of garnishment was the
sole method of recovering property of the defendant that is in the
possession of a third party. See generally ORS 18.618, 18.615. The
prejudgment garnishment process has been incorporated by reference
into ORCP 83–84. See ORS 18.605(1)(b), (2)(c). The method for
obtaining prejudgment claim and delivery (replevin) also was addressed
when the legislature passed ORCP 85 in 1981.
            CAVEAT:      It is difficult to generalize regarding the
      precedential value of pre-1981 cases in the area of provisional
      process. If the Oregon courts were construing statutory language
      that has been perpetuated in the present law, those cases may be
      useful precedent. Carefully compare with current law the wording
      of the statutes being construed in pre-1981 cases.
      In 1987, the legislature further changed provisional process in
Oregon by providing that before attachment is issued or any property is
attached under ORCP 84, the plaintiff must obtain, and have recorded
in the County Clerk Lien Record of that county, an order under ORCP
83 that provisional process may issue. ORCP 84 A(1). Between 1989
and 2001, the legislature adopted numerous amendments to the
garnishment statutes, including the requirement that a garnishee search
fee be paid when the garnishee is a financial institution (ORS 18.790)
and creating a “writ of continuing garnishment,” which was valid to
garnish wages for 90 days or more (ORS 18.625(2)–(3)). The 2001
Legislature also provided a “safe harbor” for a garnishee who discovers
that a voluntary or an involuntary bankruptcy petition has been filed
before the garnishee delivers the garnishee’s response pursuant to ORS
18.680. In that event, the garnishee may note the fact on the garnishee
response form (ORS 18.835) and return that form without tendering any


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                                                Provisional Process / §1.5

funds to the garnishing creditor. ORS 18.838. The garnishment is stayed
pursuant to 11 USC §362.
      The legislature also amended the garnishment statutes to allow
process servers, other than a sheriff, to charge any fee agreed to by the
server and the person requesting the service, for service of process or
delivery of a writ of garnishment. However, in a cost bill, no more than
the statutory amounts may be claimed for service of process under ORS
21.410. ORS 20.115(1)(b). Fees for delivering a writ of garnishment are
not so limited. See ORS 18.652(5).
    The garnishment statutes were completely revised in 2001, and are
now set forth in ORS 18.600–18.910. See chapter 7, infra.

  II. EXPLANATIONS, DEFINITIONS, AND DISTINCTIONS
A. Provisional Remedies Covered in This Chapter
      1.    (§1.3)    Attachment
      Attachment is the procedure by which an unsecured creditor
obtains a judicial lien on the debtor’s property before judgment. See
ORCP 81 A(1). Attachment is available only in limited situations
specified in ORCP 84 A(2) and should not be used unless a favorable
judgment is virtually certain. To obtain attachment, a party must follow
all the steps and procedures provided under ORCP 83.
     See §§1.37–1.48, infra, for discussion of attachment.

      2.   (§1.4)     Garnishment
      Prejudgment garnishment is the procedure by which a creditor
reaches a debtor’s tangible or intangible personal property that is in the
possession, control, or custody of a third person (the garnishee). See
ORCP 84 D(2)(b). A creditor may obtain a prejudgment writ of
garnishment in the same situations in which attachment would be
allowed. Garnishment is available only to an unsecured creditor. The
procedure for obtaining prejudgment garnishment is identical to that for
attachment and includes all necessary steps under ORCP 83.
     See §§1.49–1.55, infra, for discussion of prejudgment garnishment.

       3.   (§1.5)    Claim and Delivery
       Claim and delivery is a form of provisional process permitting a
secured creditor or party claiming other than as an unsecured creditor
(i.e., a party from whom property has been converted) to recover

                                                                      1-7
§1.6 / Provisional Process

possession of personal property held by the debtor. The prejudgment
remedy was traditionally known as replevin but is now referred to in
ORCP 85 as “claim and delivery.” A party seeking claim and delivery
under ORCP 85 also must comply with the procedures set forth in
ORCP 82 and 83. See ORCP 85 A.
      See §§1.56–1.60, infra, for discussion of claim and delivery.

B.    Provisional Remedies Not Covered in This Chapter
      1.    (§1.6)     Receivership
      A receiver is an officer appointed by a circuit court to take charge
of a party’s property while a civil action is pending. The receiver is
responsible for managing and disposing of the property as the court may
direct. See ORCP 80 A. The rules for obtaining a receiver before
judgment are set forth in ORCP 80. The only portion of ORCP 81–85
that applies is ORCP 82 A(2), relating to bonds. An attaching creditor
is entitled to appointment of a receiver pursuant to ORCP 80 B(5). See
chapter 2, infra, and 2 OREGON CIVIL PLEADING AND PRACTICE ch 31
(Oregon CLE 1994 & Supp 2001) for discussion of receivership under
ORCP 80.

      2.    (§1.7)    Temporary Restraining Order
      A court may issue a restraining order pending a hearing under
ORCP 83 at which a party is seeking a writ of attachment, writ of
garnishment, or order for claim and delivery. ORCP 83 F. See Forms
1-1, 1-2, and 1-4. ORCP 83 also provides that a restraining order can be
the ultimate provisional remedy sought by a party. ORCP 83 I.
ORCP 79 deals with restraining orders that are not coupled with other
forms of provisional process under ORCP 83. ORCP 79 also pertains to
cases in which a preliminary injunction is being sought. See 2 OREGON
CIVIL PLEADING AND PRACTICE ch 30 (Oregon CLE 1994 & Supp
2001).

C.    (§1.8)      Execution
      Execution is the means by which a judgment is enforced against
property in the possession of the judgment debtor. Execution is
exclusively a postjudgment remedy. After judgment, the judgment
creditor can cause the court clerk to issue a writ of execution directing
the sheriff to seize the defendant debtor’s property in the defendant’s
possession. If the judgment debtor’s property is in the possession of a


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